Standing Committee B

[Mr. James Cran in the Chair]

Pensions Bill

Nigel Waterson: On a point of order, Mr. Cran. First, I welcome you back to our proceedings in Committee. I hope that you had a refreshing and enjoyable Easter break, as I am sure we all did although it was marred slightly by a raft of Government new clauses and amendments that were tabled only last Thursday. I wish to flag up some issues concerning where we are with the Bill. You will know that a motion was tabled on the Floor of the House last night to extend our debates in Committee for another week and that no doubt there will be pressure to hold a meeting of the Programming Sub-Committee.
 I wish to give the Minister a chance to update the Committee on where matters stand at present. The Government have dealt with section 67 simplification and consultation. They have said that other issues, such as defined contributions and limited price indexation, might be dealt with on Report. However, I wonder what else—if anything—of any significance will be proposed. I am not talking about minor drafting or consequential amendments; what amendments of any significance are likely to be tabled by the Government in Committee?

James Cran: Of course, that is not a point of order for the Chair, but doubtless those who can deal with it will respond to it.

Malcolm Wicks: Further to that point of order, Mr. Cran. Will it be helpful if I respond briefly to the hon. Gentleman's points? I wish first, however, to welcome you back to the Chair for our final sittings. Members of the Committee will be aware that, at the end of our sitting on Thursday 1 April before the recess, I outlined the amendments that we planned to table for discussion in Committee. I am sorry that we were unable to table all the amendments during the recess, but we have been considering our plans. The Committee will note that some of the new clauses are on the amendment paper and, subject to progress, we may reach some of them today. After the bank holiday, we sent a briefing note to hon. Members about the new clause that will amend section 67 of the Pensions Act 1995. As they are aware, it deals with the modification of accrued rights.
 However, I understand that some confusion arose about the briefing note on the new clauses that deal with the requirement for employers to consult on future pension changes, so we sent out again a briefing note about it last night. An explanation of new clause 33, entitled ''Increase in age at which short service benefit must be payable'', will be available at the end of this morning's sitting. The other amendments that have been tabled are self-
 explanatory. I must apologise to you, Mr. Cran, and to members of the Committee for the delay in tabling the new clauses and for any confusion concerning the distribution of briefing notes. No discourtesy was intended, as no one gains if a Committee has insufficient detail on which to judge its scrutiny.

Nigel Waterson: Further to that point of order, Mr. Cran. I am sure that my proposal will be of assistance to you and the Committee. Yet again, the curse of the briefing note has kicked into our proceedings. I have not seen either of the briefing notes to which the Minister referred. I have been trying with a wet towel around my head to understand the section 67 stuff, which I doubt we will reach today. However, it would be nice to know the thinking behind it.

Malcolm Wicks: Further to that point of order, Mr. Cran. I apologise again if briefing notes have not got through. I think that the hon. Member for Northavon (Mr. Webb) received the information and I know that those in my office were telephoning the office of the hon. Member for Eastbourne (Mr. Waterson) to see how we could best get information to him during what was inevitably a difficult period over the Easter holiday.Clause 167 Meaning of ''reviewable matters''

Clause 167 - Meaning of ''reviewable matters''

Question proposed, That the clause stand part of the Bill.

James Cran: With this it will be convenient to take Government new clause 16—Meaning of ''reviewable matters''—and Government new schedule 1.

Nigel Waterson: I wonder whether the Minister would take us through his new clause. It may be helpful, and afterwards I can raise certain issues.

Malcolm Wicks: We have discussed the main ideas of setting up a pension protection fund. We are now about to deal with some important consequential matters, after which we shall deal with issues regarding the new pension protection fund ombudsman. We have now had 16 sittings in Committee and, subject to the will of hon. Members, we may have six or so more sittings. As we expected, the Committee's proceedings are turning into more of a marathon than a sprint. That enables me neatly to note and congratulate the Under-Secretary of State for Work and Pensions, my hon. Friend the Member for Grantham—Gravesham—

Chris Pond: Gravesham.

Malcolm Wicks: Gravesham. Grantham is associated with another notable parliamentarian. I congratulate my hon. Friend on completing the London marathon in four hours and 15 minutes. He tells me that that was slightly worse than last year, but he was drafting new clauses as he was running.

Nigel Waterson: The chicken?

Chris Pond: The hon. Gentleman referred to the chicken. It was a little disconcerting at 19 miles to find
 myself with a rhinoceros and three chickens still in front of me. Although this Committee's proceedings deprived me of the time to do the training necessary to improve on my previous time, they prepared me in other ways. The marathon was sometimes a painful event, and it took a long time. At the end, one ended up in the place in which one began. In that sense, experience of this Committee prepared me well.

Malcolm Wicks: The intention is to replace clause 167 with new clause 16, which would provide a list of pension protection fund board decisions that could be disputed. The Government amendments have the following objectives.
 First, as a drafting point, we have decided that, as the list of reviewable matters is extensive, it would be best placed in a schedule: new schedule 1. Secondly, the new schedule would extend the list of reviewable matters. Thirdly, new clause 16 would allow regulations to delete items from the reviewable matters list, if that was required. Finally, the new clause would provide a mechanism for determining whether the board had failed to reach a decision by reference to a prescribed time limit. 
 I do not intend to discuss each individual addition to the list of reviewable matters in detail; to do so would take up a great deal of valuable time. However, I would like to make the following point. As well as adding to the list of reviewable matters, the list would now include the failure of the board to reach determinations in certain circumstances. 
 If, for example, the board failed to determine a person's entitlement to PPF compensation within a prescribed period, that person would be able to ask the PPF board to undertake a review. The general intention behind the list of reviewable matters is to make clear in legislation which of the board's decisions could be challenged. On the face of it, it may seem reasonable to allow any board decision to be challenged, but there are good reasons for the dispute procedures to have relevant parameters. 
 For example, the fact that a compensation rate of 90 per cent. is payable to non-pensioners is not open to dispute, because it is set out in legislation. It is the calculation used for all, and there can be no deviation from it. Allowing such a decision to be challenged would result in delays and raise expectations that a different outcome was possible when it was not. Although PPF members would be unable to challenge the 90 per cent. compensation level, other matters regarding their compensation rate could be challenged. For example, if the board had based someone's compensation rate on 10 years' rights when they had had 20 years' rights, that, of course, could be disputed. 
 In a similar vein, schemes would be unable to dispute the formula used for calculating the levy. However, they would be able to challenge the board's decision that they were an eligible scheme and therefore had to pay the levy. If the levy calculation had been based, for example, on an incorrect 
 membership number, the scheme would also be able to challenge the amount of levy payable. 
 The clause aims to provide a procedure for dealing with PPF disputes that is fair and transparent, and that provides clarity of approach for people to raise disputes if they have a right to do so. It sets out those matters that may affect the civil rights of interested parties, and provides the basis on which actions may be challenged.

Nigel Waterson: I add my congratulations to the Under-Secretary on his achievement. I hope that he raised a great deal of money for his favourite charity.
 One of the briefing notes that has reached me, and I am grateful for it, is about the complexities of clause 167 and new clause 16. Let me say two things at the outset. First, I can see the logic, from a drafting point of view, of re-casting that as it has been done. However, it has the maddening effect, which is familiar to all hon. Members who have dealt with large Bills, that when we re-cast our amendments on Report we will have to change all the numbering. But we cannot have everything—at least, not in opposition. 
 Secondly, I should like to make another substantive general point, which I will, perhaps, develop in more detail on clause 168 to put in context my remarks on new clause 16. Do we need a review? We are in danger of developing a cumbersome and bureaucratic system. We will deal with the role of the ombudsman and everything else later. The Government are trying to mirror the provisions of the European convention on human rights and have been nervous about getting out of kilter with what that proposes. However, we are creating a new bureaucracy, when the answer is, perhaps, to cut out the review and go straight to the next stage. I will develop that point in a moment. 
 There are a few points arising from what the Minister said on the helpful explanatory note. If there is to be a review, it is most important that the list sets out those issues where the board has failed to reach determinations, let alone where it has made the wrong determination. One of the clear examples in the explanatory note is where the board fails to determine a person's entitlement to PPF compensation within a prescribed period. On a human level, that will be one of the most important reasons for having such reviews—and another good reason for trying to short-circuit the system. However, we are considering another part of the Bill, which will be heavily underpinned by regulations later on. I will not even raise the grant regulations, because I have long since given up on that. 
 Although it is difficult to get a handle on the time scale that Ministers, for example, might have in mind, perhaps I may use this example to draw the Minister out. This is a clear case of somebody who may be in personal difficulties because they have not been given the compensation to which they are entitled, their company has gone bust and their pension scheme has left them high and dry. What time scale is envisaged for trying to deal with such issues? Presumably, some issues would be relatively easy to deal with and could be dealt with rapidly on the basis that they were simply book-keeping or technical errors by those running the 
 system. For example, the Minister mentioned the question of 10 or 20 years. The note talks about trying to produce clarity of approach. I am concerned—I shall develop this in a debate on another clause—that we shall get into a confusing, rather than a clarity-inducing, situation. 
 Paragraph 3 of the schedule, which, as the note says, was omitted from the list in clause 167, deals with the question of the scheme's trustees having to apply to the board to assume responsibility if they think that 
''the employer is unlikely to continue as a going concern, and . . . the prescribed requirements are met''.
 That is set out in clause 101(3). There is a similar provision in subsection (4), and so on. That is an important provision, so why was it left out? Perhaps there was a reason why, at the time of first drafting, it was thought that it was not appropriate for this part of the Bill. 
 Another issue arises in paragraph 5 of the schedule—formerly clause 167(d)—which has now been set out in different wording: 
''a scheme that is eligible to enter the PPF should not start to wind up during an assessment period if it has insufficient assets to meet its PPF level of liabilities. The Board may validate . . . the action of a scheme's trustees or managers to wind up the scheme''.
 That significant decision has to be made by the board. Is there any view that there should be a fast-track way of dealing with that kind of determination and review, where there are problems with a scheme? I congratulate the Government on belatedly putting forward the regulations relating to wind-ups. We look forward to debating those, I hope fairly soon. I believe that those regulations are due to come into force in May; that is good news, albeit belated. There is some read-across to paragraph 5 of the schedule. Is there any way of having a fast-track approach to dealing with the matters? 
 Another important point relates to paragraph 10. As I understand it, that paragraph includes a brand new provision, although I may stand to be corrected. The provision follows the introduction of the large schemes requirement. According to the notes, 
''Where a scheme rescue is not possible for a large scheme and the scheme has sufficient assets to meet its PPF level of liabilities, the trustees or managers must apply to the . . . Board for authority''.
 That is an important decision. It will be interesting to hear from the Minister how that relates to the relationship between the PPF level of liabilities, the statutory funding requirement and the requirements of FRS 17; we have already touched on the subject. 
 I will give a final example, because from anyone's point of view, the redrafted schedule is pretty voluminous. Paragraph 14, formerly clause 167(j), is about the 
''determination . . . of a person's entitlement to compensation''.
 That partly relates to a point that I made earlier. A person might challenge the number of years of accrued rights on which his compensation is based. That strikes me as another clear example of something that could affect a person significantly. Is there not an argument for a fast-track approach to the reviews, or for some 
 reviews to move faster than others? Does the Minister have an idea of an overall global time scale in which the matter should be resolved? 
 The note makes it clear that the formula—and so, for example, the 90 per cent. figure for non-pensioners—cannot be disputed. However, there may be a genuine dispute about the number of years' accrued rights, about how someone's compensation is calculated, or even about someone being denied compensation. Those issues must be resolved rapidly, either by cutting out the review stage altogether—that is an option, and we will perhaps say more about it later—or by ensuring a fast-track method of challenge for those concerned. I hope that that is helpful. 
 As I say, I entirely understand the logic of how the provisions have been recast. It is helpful to have so much more detail included, but many details are still out there somewhere in draft regulations.

Steve Webb: Whereas many of the provisions that we will consider raise issues that had never been in the Bill, new clause 16 is a second go at an issue that was always in the Bill, and was botched the second time round. That is slightly worrying. It is a little worrying that, probably only a month or two after the clause was first written, it was realised that there were holes in it, and it had to be rewritten.
 I asked my children in which of the Wallace and Gromit stories the characters are rushing down a railway track, furiously laying down track before the train can get to it. [Hon. Members: '' 'The Wrong Trousers'.''] Yes, that is right; other hon. Members have children, too. My feeling is that the Bill is very much a matter of the Government trying to get to provisions before the Committee does. The ink is sometimes still wet, and it is still wet on new schedule 1. Does the Minister have any reflections on that subject? 
 Occasionally, the Opposition's draft clauses and schedules are not quite perfect when they emerge from the womb. However, this measure is not very contentious: the PPF has a job to do, and if it does not do the job, one asks it to look at the matter again, and then one goes to an ombudsman. That does not sound particularly complicated, yet here we are, rewriting it within a few weeks of its first being written. That is slightly disturbing. Will the Minister comment on it? How confident is he that the rest of the Bill will survive more than a couple of months once it is in action? 
 As I understand it, one of the main changes in new schedule 1, as distinct from the original clause 167, is that people can ask the board to look again when it has failed to do something, not merely when it has done something wrong. That raises the issue of timetabling and time scale, which are referred to in the explanatory notes. When a company goes out of business and its pension fund starts to be wound up, people face the elastic problem of how long it will all take before they know where they stand. New schedule 1 is trying to tackle that point by saying that when things have gone on too long, people can go to the board and say, ''You haven't done this. How about 
 it?'' The board might shuffle its feet nervously, and people could then go to the ombudsman. 
 Can the Minister give us some indication of the time scales that we are talking about? We are setting up the pension protection fund. If my medium-sized but fairly smallish employer with a typical scheme goes out of business today and the scheme falls into the hands of the PPF, how long will it be before I know where I stand? This new schedule gives me powers to go to the board if a decision has not been made in a prescribed time, but we do not know how long that period is. Will the new schedule apply after days, weeks, months or years? Some schemes take years to wind up. For people who have lost their pension rights, will the PPF represent a speeding up in working out their new entitlements, or a slowing down? Will the fact that the PPF is involved mean that people are left in limbo for longer? It all depends on what the prescribed time is. 
 A problem linked to that, which seems germane, is getting hold of information from the Department for Work and Pensions when schemes are wound up. Will the PPF have any privileged position in getting hold of information from its sponsoring Department so that schemes can be wound up and people can be told what they are entitled to more quickly? Will the fact that the PPF has been set up by the DWP—albeit at arm's length—mean that people can get information and know where they stand more quickly? Stepping aside from the minutiae of the list in the schedule, the point is that when workers have lost their job or their company has gone out of business, they want at least to know what their pensions will be. We do not know from the schedule how long they will have to wait, or whether the whole process is longer or shorter. I have no understanding of the big picture, so I hope that the Minister can share his understanding.

Malcolm Wicks: This has been a useful discussion. We have opted for a two-stage review process for the PPF, as we believe that that strikes a reasonable balance between fairness and administrative efficiency. Errors occur in any organisation, and although we intend to keep those to a minimum in the PPF, it is more efficient for straightforward reviews to be dealt with by the original decision maker. The hon. Member for Eastbourne had some doubts about whether we needed a two-stage process, but I argue that, particularly for errors—or rather, alleged errors—that are relatively easy and quick to resolve, resolution is best done as part of an internal review.
 If the complainant remains dissatisfied with the outcome of the first-stage review, a second-stage review can be requested. That will be carried out by a specially constituted committee of the board to be known as the reconsideration committee. In terms of scale and administration, the PPF will be much larger than occupational schemes, and we recognise that compelling schemes to have a two-stage process is not always administratively efficient. We have therefore agreed that schemes should be able to have a single dispute resolution process, provided that the decision on the dispute is reached by the scheme's trustees and is not delegated. 
 As for how long the process will take, obviously we want disputes resolved as quickly as possible. We want to avoid unnecessary delays. Some PPF board decisions cannot be unpicked at a later stage—for example, the decision to take a scheme into the PPF. It is therefore important to allow those involved the right to an impartial review. Only then can we be 100 per cent. sure that the right decision has been reached, and that all the relevant information has been taken into account. It is therefore possible that if a PPF decision is disputed, it could take longer to reach the final decision—after all, we are talking about important matters. In such cases, compensation will remain in payment until the final decision is made.

Steve Webb: I want to make sure that I have explained myself clearly. My question about time scale was not so much about situations in which something is done, but those in which something is not done. If the PPF gets involved, it might take a long time for it to do its sums and get the information, but if nothing is done, people can go to the PPF board at some point and ask for a review. I want to know how long things can go on for before people have the right to go to the PPF board.
 The question is how long the whole process of getting anything done at all can take, rather than how long it takes to query something that has already been done.

Malcolm Wicks: I understand that question, and its importance. I am bound to say that to some extent many of those matters and the detailed questions will have be left to the PPF. It will be its task to develop good practice and possibly to consider whether to set targets. However, we will put time limits in regulations, and they can be revised if necessary, with a view to ensuring that the PPF board provides an effective and efficient service to its customers. We will have to consider how detailed those regulations will be, because it would be wrong to make in Committee decisions on minutiae that would be best left to the board. I hope that hon. Members will realise that we want decisions to be made as quickly as possible, provided that that is compatible with the seriousness of the issue that is being raised.
 The hon. Member for Eastbourne asked why there was one omission from the original drafting. I am afraid that that comes down to a simple drafting error, and it is best to admit that. The hon. Member for Northavon asked why we were revising these matters. Again, I have to say that we are working in complex territory. We took the decision early on, and we have explained to the Committee that, given the importance of getting the PPF up and running, it would have been wrong to delay this legislation by a year. However, as we have admitted, that has meant that a good number of Government amendments have been made. 
 I know that the hon. Member for Northavon will be sensitive and sympathetic to the need to examine drafting carefully, because I think that before Easter he admitted that one of his amendments, although good natured in intent, would have meant that my Department had to increase the pensions of everyone throughout the world. Errors can be made.

James Cran: I shall now put the Question on the clause, and I remind the Committee that Government new clause 16 and Government new schedule 1 are associated with it.
 Question put and negatived.Clause 168Review and reconsideration by Board of reviewable matters

Clause 168 - Review and reconsideration by Board of reviewable matters

Question proposed, That the clause stand part of the Bill.
Mr. Waterson: May I return to the principle of the issue of review? We entirely understand why there should be a PPF ombudsman and that what he or she does must largely mirror much of the good work that has been done by the ombudsman set up under the 1993 legislation. However, it is interesting that the Library note refers to this part of the Bill as dealing with the ''internal dispute resolution procedure''. In a funny sort of way, this is not quite the same thing as people complaining that their new fridge does not work, or their car does not do what it should. As I said in a previous debate, matters of life and death could be involved for people who are not getting their PPF compensation at all, or having it completely miscalculated and receiving far less than they are due. We are raising this great edifice of a new PPF and everything that goes with it in an attempt to ensure that if something horrible goes wrong, people do not miss a beat, and do not suddenly find that they are facing destitution because their pension has been lost—or, if it is in payment, that it has been stopped. That is an important aim.
I can see that it is necessary to be able to check decisions made by the board—but what have we come up with? When in doubt, this Government reach for the box marked ''Set up a new body'', and they have done that yet again, so we have the reconsideration committee, which will be called upon to consider these matters. I spent some time relaxing over Easter, and I remembered that there was another sinister body, which I think was called the determinations committee; it feels as if the Committee dealt with that eons ago.
What do we know about the people who will be on the reconsideration committee? We know who will not be eligible. This is one of the myriad things that is to be dealt with by regulation, and subsection (5)(c) says that individuals should not be involved
''in giving a reconsideration decision''—
which I assume means that they will not serve on the committee—if they were
''concerned in the reviewable matter in respect of which the decision is to be made''.
That is eminently sensible, and is really a side issue of natural justice.
However, do we need a whole new body? How often would it meet? How many people would be involved? If it met irregularly, how long could the delay be before it made a decision? Would it be convened simply to deal with a particular complaint, 
or to deal with a raft of complaints? In my wildest dreams, I do not expect to be shown draft regulations, but we ought to be given some information on this.
Watson Wyatt knows a thing or two about these matters, and it expressed things rather well in the statement that it put out when the Bill was published. It said:
''To some extent, the Bill suffers from the Government's determination to demonstrate its compliance with the Human Rights Convention principle that every person is entitled to a fair and public hearing by an independent and impartial tribunal.''
Who could argue with that?
Mr. Pond: You are about to.
Mr. Waterson: We could argue with it if it took far too long to produce
''a fair and public hearing by an independent and impartial tribunal.''
What we are concerned about was expressed rather well by the hon. Member for Northavon, fresh from his visit to my constituency yesterday.
Mr. Pond: Key marginal!
Mr. Waterson: A top target. I am always a top target—but we soldier on.
These matters must be resolved quickly. ''Justice delayed is justice denied,'' is the old lawyers' saying. Watson Wyatt continued:
''This has led the Government to include exhaustive provisions establishing procedures, reviews and appeal bodies in relation to decisions of both the Regulator and the Board of the Pension Protection Fund.''
To use a hoary old politicians' phrase, there is a balance to be struck; that is always said on such occasions. A balance must be struck between giving people a framework that they can rely on to be fair, impartial, just and all the other good things described by all those 10-dollar words, and giving them a system that will be accessible reasonably rapidly to individuals who are being badly done by—people who, as I have said, might be facing destitution.
I want to probe Ministers a little further about how the system would work. Would it give a full summary decision on a particular reviewable matter? Would it be required to give reasons? It is legitimate to ask questions about such matters. I do not remotely expect to see the draft regulations, or anything like them, but somebody somewhere must be thinking about those issues.
Subsection (4)(d) states that there is a power
''to pay such compensation as the Board considers appropriate to such persons as it may determine''.
That is a broad power, and a sensible one in many ways. However, how can that be appealed? Can it be taken further? Can it be taken to the ombudsman? Does it apply to all those powers?
Subsection (3)(a) is curious. It mentions a ''review decision'', presumably made by the reconsideration committee,
''to be made otherwise than on an application''.
How would that work? My understanding of the whole structure of clause 168 and related clauses is that people who felt that they had been unjustly 
treated, for whatever reason—the board had made a wrong determination, had failed to make a determination, or had done what it should not have done, for example—could apply to that shadowy body, the reconsideration committee. That name has a certain ring to it; one could go to the golf club and say, ''I serve on the reconsideration committee of the pension protection fund''—but we will not go into that.
How could a matter come before the RC, as we shall presumably come to know it, without somebody making an application? Could the board shop itself, turn itself in, and say, ''Oh my God, we've suddenly realised that we've been incredibly unfair to Mr. Smith of Acacia avenue in turning down his compensation claim. Stop us before we do it again.'' Is that how it would work?
How could such a matter be dealt with otherwise than through an application by an aggrieved party? Would the Secretary of State get involved? Would somebody have written to the ombudsman directly, and have been referred back to this procedure? I do not know, but I think that the Minister may want to tell us.
There is another interesting aspect in subsection 5(c), about giving notice. It states that the regulations must include provision
''with a view to securing that individuals concerned in giving a reconsideration decision were not concerned in the reviewable matter''.
I have already touched on that, but I want to be clear about what level or type of person would be on the committee. Would they be senior executives working for the board? Would they be outside, totally independent people—non-executives, as it were? Such people could not possibly have been involved in the reviewable matter in respect of which the decision was made in the first place.
The regulations are also supposed to provide a procedure for ''reaching and giving decisions'', and clause 168 mentions the
''rights of interested persons to make representations to the Reconsideration Committee on a reconsideration'',
and so on. Does that suggest that there would be a formal hearing of some sort, perhaps with legal representation? This is getting a bit formalised, even ossified.
If the procedure, which as the note says is only an internal dispute resolution procedure, is to be useful, it should be summary and expeditious and should not be bogged down in complexity. There is always the ombudsman to go to, and presumably none of this would shut people out entirely from their own legal resources if they wished to make an application for judicial review or whatever. That possibility still lurks in the background somewhere, unless the Minister is prepared to argue the contrary.
I have asked a series of fairly detailed questions, and I hope that the Minister will answer them, either now or in correspondence. At the end of the day, what I am saying is that if we are to have the review, the 
reconsideration committee and all that goes with it—Opposition Committee members are far from convinced that they will add value to the system—we should make the processes short and summary. We should make sure that the review will move swiftly, so that people can then get on to the ombudsman at the next stage. I hope that in many ways the ombudsman will be much better equipped to deal with such issues. I hope that the Minister will be able to deal with those few points here and now.
Malcolm Wicks: No doubt some of these more detailed points can be considered when we talk about the regulations. Obviously, the balance between having a fair review and appeals system and having some regard to simplicity is difficult to strike. I have no doubt that if we had proposed a much simpler, perhaps one-tier, straightforward, broad-brush system of review, hon. Gentlemen would have argued, perfectly properly, that it was not sophisticated enough. I do not necessarily suggest that the hon. Member for Eastbourne would have argued that, because I would not want to accuse him of inconsistency; he is already sensitive about the idea of being a target, and it is important not to provide ammunition to the enemy.
We envisage a system whereby if there is an allegation of what turns out to be simple error, it will be omitted or put right quickly—within days, one hopes, but we have to consider that carefully. If that does not satisfy the appellant, that admittedly revolutionary body called the reconsideration committee—there is no time to table an amendment to reconsider that title—will go into action. We can promise that in all cases that committee will be speedy, as great matters could be at stake and more information might need to be collected. From then onwards, there is a right of appeal to an ombudsman and, as is usual in such circumstances, on a point of law the matter could go to court. We think that that is a sensible system, but with regulation and with the board's practice we need to ensure that we clearly pursue our objective of doing things as quickly and efficiently as possible.
Mr. Webb: I agreed with the Government on this matter—until the Minister started speaking. The analogy that I had in mind was the social security appeals process, whereby if officials have slipped up they can say, ''Yes, we've slipped up. We'll change it.'' If there is a dispute, people can go to an independent appeal. The Minister seems to be saying that here, there are three stages. There is the ''We goofed and we'll change it'' stage; then there is the reconsideration committee; then there is the ombudsman. I had assumed that this business about reconsideration was simply to give the PPF board the statutory ability to change its mind in order to correct something fairly uncontentious and trivial. However, the Minister seems to be saying that it could do that anyway, and this clause and the process are about something rather stronger than that. These clauses are about the next tier of review, and then there is a third tier. Is that correct? Is that not out of kilter with the social security process?
Malcolm Wicks: I think that we envisage that, wherever possible, the board will resolve a matter internally; one hopes that that will happen in the great majority of cases. It can resolve very simple matters with an official looking at the problem and saying, to use the hon. Gentleman's phrase, ''Yes, we've goofed. Hands up. We'll correct this.'' If that does not satisfy the customer, the issue can go to the reconsideration committee, and one envisages that that would be for the more complex cases, which may or may not take longer. Here, we are talking about internal procedures. In any system, everyone would be reluctant to see a huge flood of cases taken to a more expensive and complicated level, such as the ombudsman, but it is right that the ombudsman structure exists to resolve any matters that cannot be resolved internally. I hope that the hon. Gentleman sees the sense of that.
I must clarify the fact that the reconsideration committee will be independent of the original decision maker. It will be constituted from the board itself, and will therefore be a sub-committee of the board. We will ensure that the reconsideration committee will be able to make decisions as efficiently as possible. I may not have allayed all doubts, but I have set out the broad intention, and I hope that we will have another go at this in more detail in secondary legislation. Although there is a temptation on these occasions to second-guess the minutiae of how the board will operate, given that the board is not yet in operation, we must make allowances for the fact that we will appoint good people to it, who will run their operation efficiently, always guided by the sensible points that have been raised by people on both sides of this Committee and of the House.
Question put and agreed to. 
 Clause 168 ordered to stand part of the Bill.

Clause 169 - Investigation by Board of complaints of maladministration

Malcolm Wicks: May I ask for your guidance, Mr. Cran? Have we finished with clause 168?

James Cran: We have just done it.

Malcolm Wicks: I beg your pardon. You are moving as fast as my hon. Friend the Under-Secretary did in the marathon.
 I beg to move amendment No. 528, in 
clause 169, page 107, line 13, at beginning insert 'alleging'.
 The amendment requires the word ''alleging'' to be added to subsection (2). Although it appears to be a minor amendment, it is required to place the intention of the clause beyond doubt. Without it, the clause could be interpreted to mean that it is necessary for maladministration to have been proved before referring a complaint to the board. The amendment makes it clear that it is alleged maladministration complaints that are to be referred for consideration. Once such a complaint has been received by the board, the normal two-stage internal review procedures commence. 
 Amendment agreed to. 
 Question proposed, That the clause, as amended, stand part of the Bill.

Nigel Waterson: I have no problem with the amendment that we have just made, as it seems eminently sensible. However, I have a difficulty with the whole principle of whether the board should investigate questions of maladministration, and there are two broad reasons why.
 To refer back to clause 168 and the question of reviewable matters, if there is to be a review—we have already debated whether that should be the case—it makes sense to have a set of reviewable matters and circumstances that can be addressed in that way, and to set it all out in secondary legislation, if not in the clause itself. My feeling is that we are discussing administrative failings—often minor ones—that can easily be cleared up. The Minister did not say anything like that, but I think that there was a slight implication that many of these matters could be dealt with easily, because once the board, or the sub-committee of the board, examined them, or perhaps, even before things reached that stage, it would be clear that there had been an error. Such an error might be considered minor from the board's point of view, but for the person at the other end it could be life-destroying. However, that is another issue; here we are dealing with a question of maladministration. 
 In a while I will argue that it might not be sensible to have a PPF ombudsman at all. There is much to be said for giving responsibilities to the existing ombudsman, who has built up a large body of experience. Why do we need yet another ombudsman? However, we will come to that issue later. A whole body of law, practice and procedure concerning maladministration has been built up from the original ombudsman—the Parliamentary Commissioner for Administration is, I think, the technical title—whose post was set up some decades ago. Initially, there was much to-ing and fro-ing about what ''maladministration'' meant. I think that the technical definition is maladministration leading to injustice, but the ombudsman has clarified much of that. 
 The fact that there is somebody that one can go to when one feels that one has been badly treated by the system has produced a great benefit to society. The first ombudsman spawned a range of mini-ombudsmen and ombudswomen and other people to whom one can go if one has a beef with local government, financial services or whatever. That principle is well established, as is the body of law and practice for dealing with maladministration. I am not sure that it is fair to ask the board, or any sort of sub-construct of the board, to get up to speed on questions of maladministration. 
 Those are separate matters—or at least I assume they are, because they are in a different clause—from those set out under clause 168. I am not entirely clear whether the internal procedures under clause 169—this again is an internal way of dealing with complaints—will be the same as, or comparable with, those in clause 168. If they are, in principle this is a four-tier system: 
 there is a two-stage review within the board or its sub-committee, then there is the ombudsman, and then there is the possibility of going to court on a point of law. 
 Although my arguments on clause 168 were thought not to be substantial enough to change the idea of having a review, it seems to me that there is a powerful freestanding argument that matters of alleged maladministration should not be for the board, although the board will have to comment when the ombudsman makes a judgment. Having dealt with the ombudsman, it is my impression that it has a two-tier process of its own. We write on behalf of a constituent, the constituent sets out their beef and we pass it on, perhaps with our own comments. Then a case handler, or someone similar, examines whether there is a prima facie case before the matter goes the full distance—if, in the light of the Under-Secretary's success at the weekend, I may use that expression. 
 Why not go straight to the ombudsman in the first place? There is a question about whether we need a totally separate new ombudsman, and we will address that when we discuss clause 170. Clause 169 addresses a state of affairs different from the matters mentioned in clause 168, which deals with reviewable matters, which are largely mechanistic and administrative issues that arise when people feel that the wrong decision has been made or a decision has not been made when one should have been. Clause 169, however, is about people alleging that they have sustained injustice in consequence of maladministration. That is a different order of seriousness. I can see no point in the board having to use its own resources to build up expertise in dealing with serious complaints. Those complaints will, by definition, be serious and they should be dealt with under the ombudsman system—or, at least, under an ombudsman system.

Malcolm Wicks: The hon. Gentleman has argued his point, and I suppose that the word ''maladministration'' can conjure up a variety of sins. I do not think it is uncommon for both statutory and non-statutory organisations, public and private, to have internal systems and means of reviewing decisions, including those that involve maladministration—indeed, I would have thought that that is typical. I had better not say that some maladministration may be of a trivial character, but we are not necessarily talking about the greatest of errors. An error may have been made, and things may have been maladministered, and that will need to be corrected.
 The two-stage internal review process that we have discussed this morning is a reasonable way of dealing with that situation, but there is the important safeguard of being able to go to the ombudsman in appropriate circumstances when people are not convinced that the internal review has produced the proper result.

Nigel Waterson: The problem with what the Minister is saying is that this will not be simply a matter of
 maladministration; it will have to amount to someone sustaining injustice, which takes it to a different level.

Malcolm Wicks: In that case, we have the process, which I thought the hon. Gentleman was charging with being complex, whereby one can go to the ombudsman's office and from there, as is usual on a point of law, go to court. I do not think that I have convinced the hon. Gentleman, but I think that our two-stage process will meet any points that arise.
 Question put and agreed to. 
 Clause 169, as amended, ordered to stand part of the Bill.

Clause 170 - The Ombudsman for the Board of the Pension Protection Fund

Nigel Waterson: I beg to move amendment No. 514, in
clause 170, page 108, line 10, leave out 'or be removed'.

James Cran: With this it will be convenient to discuss amendment No. 515, in
clause 170, page 108, line 11, at end insert 
 ', or 
 (c) may be removed from office by the Secretary of State with the written agreement of the Lord Chief Justice.'.

Nigel Waterson: I shall have quite a lot to stay on stand part, but the point that I shall make now is fairly narrow, and entirely concerned with subsection (3)(b), which is about the circumstances in which the PPF ombudsman can be removed from office.
 This is a serious issue. In amendment No. 515 we suggest that the person should be able to be removed from office only by the Secretary of State with the written agreement of the Lord Chief Justice. That might seem an unusual way of approaching the matter, but I understand that the contractual arrangements with the current ombudsman—the one established under the 1993 legislation—set out that basis for removal. Dismissal of the ombudsman, or non-renewal of his or her appointment, on the grounds of misconduct requires the decision of the Secretary of State, with the concurrence of the Lord Chief Justice. 
 There could be situations in which it was politically advantageous for the Secretary of State to dismiss an ombudsman, particularly someone who had come into the job with considerable keenness and a desire to make a difference, so there should be a safeguard against that. I am not wholly committed to the role of the Lord Chief Justice; I drafted the amendment to reflect the current state of affairs. However, there should be some safeguard—some further condition required—in addition to the rather bald statement in the subsection as currently drafted: 
''or be removed from office in accordance with those terms and conditions.''
 It must be implicit in the subsection that such a removal is at the behest of the Secretary of State, because he is the person named in subsection (2). I am sure that the Minister will correct me if I am wrong about that. 
 This is a question of bolstering the independence of the new PPF ombudsman, and of making it clear that the appointee is there to do a job and should be allowed to get on with it, unless they vacate the office for any normal reason, such as resignation or retirement. There should be a safeguard to prevent the Secretary of State from removing them for no good reason. I am not suggesting that any future Secretary of State would consider doing such a thing, but in case a maverick Secretary of State took against the PPF ombudsman for some reason, some other significant person should be involved. That person need not be the Lord Chief Justice—it could be almost anyone. Perhaps there should be a separate ombudsman to deal with any problems that the PPF ombudsman might face in due course. That would be the Government's default reaction to such a problem, given the way that the Bill has developed and expanded its tentacles during our consideration of it. I shall be interested to hear the Minister's response.

Malcolm Wicks: The hon. Gentleman suggests that there might be a special ombudsman for the PPF ombudsman. I had not realised that he had had sight of one of our new clauses.

Nigel Waterson: Chance would be a fine thing!

Malcolm Wicks: Very good. I jest, of course. I am so pleased to be talking about the right clause at the right time that I felt like making a small joke.
 The clause allows the Secretary of State to determine the terms and conditions for appointing and, if necessary, removing the PPF ombudsman from office. It provides that the Secretary of State may remove the ombudsman from office only in accordance with the terms and conditions. The grounds for removal will include incapacity, bankruptcy and arrangements with creditors. I emphasise that it is unlikely that the Secretary of State would ever need to use that power. As we intend to be in office for a considerable time, we do not anticipate there being a maverick in the post. 
 The amendments would require the Secretary of State to obtain the written agreement of the Lord Chief Justice before removing the ombudsman from office. We agree with the principle that an independent office holder should be required to confirm removal, but do not believe that it is necessary to include that in the Bill, because we would not want to be limited by legislation to naming one individual—in the case of the amendment, the Lord Chief Justice. The need for an independent office holder to agree to the removal of the PPF ombudsman will be included in the terms and conditions of the post, in the same way as that requirement is included in the terms and conditions of the pensions ombudsman. 
 I hope that the hon. Gentleman realises that we agree with the spirit of his amendment. A matter as important as the removal of an ombudsman must be considered by another important individual. Our proposal is less expensive than a national referendum, but we agree with the overall spirit of the amendment. I therefore ask the hon. Gentleman to withdraw it.

Nigel Waterson: I am delighted to hear that the Minister has taken this point on board. Although I do not entirely accept his discounting of the possibility that there may be a maverick Secretary of State one fine day, at least the issue will be dealt with in some shape or form. I am delighted to beg to ask leave to withdraw the amendment.
 Amendment, by leave, withdrawn.

Nigel Waterson: I beg to move amendment No. 534, in
clause 170, page 108, line 11, at end insert— 
 '( ) Subject to any provision made by regulations under section 174, the procedure for conducting an investigation by the PPF Ombudsman shall be as he considers appropriate in the circumstances of the case; and he may, in particular, obtain information from such persons, and in such manner, and make such inquiries, as he thinks fit.'.

James Cran: With this it will be convenient to discuss amendment No. 536, in
clause 174, page 110, line 42, at end insert— 
 '( ) For the purposes of any investigation under this section, the PPF Ombudsman shall have the same power as the court in respect of the attendance and examination of witnesses (including the administration of oaths and affirmations and the examination of witnesses abroad) and in respect of the production of documents.'.

Nigel Waterson: These are probing amendments, as are most of our amendments. I am sure that the matters to which they pertain should, and will, be dealt with in regulation in due course; but we want to flag them as important points of principle for us and get a commitment from the Minister that these are issues on which all the finest minds in the Department for Work and Pensions are working.
 Amendment No. 534 is entirely procedural and says that subject to any regulations that may be made 
''under section 174, the procedure for conducting an investigation by the PPF Ombudsman shall be as he considers appropriate in the circumstances . . . and he may . . . obtain information from such persons, and in such manner, and make such inquiries, as he thinks fit.''
 Perhaps the Minister will say, ''We do not need to set this out in legislation''. He may be right. It is, however, important to make it clear that the ombudsman has wide powers and discretion to seek information from individuals and to seek a variety of different information, and has powers to ensure that that information is supplied. 
 Amendment No. 536 also makes it clear that the ombudsman should 
''have the same power as''
 the courts 
''in respect of the attendance and examination of witnesses (including the administration of oaths and affirmations and the examination of witnesses abroad) and in respect of the production of documents.''
 We go to some lengths in other, unconnected parts of the Bill to set out powers that are available to investigate ongoing problems in pension schemes. We have had some debate about whether some of those powers are too draconian, or not sufficient, and where the famous balance should be struck. However, we are a little light on detail—unless it is in one of these new 
 clauses that are lurking in the wings—about the ability of the ombudsman to call for information and have powers to ensure that it is available. 
 A later clause, which we may debate briefly on stand part, deals with obstruction of the PPF ombudsman. Perhaps there are already powers, buried away in legislation, that are applicable to existing ombudsmen, that enable them to do that and will be applied to the new ombudsman as well. If that is so, I should be reassured to hear it from the Minister. It is important to flag up that the ombudsman will have serious powers to call for documents and witnesses, administer oaths, get evidence on oath, and so on, so that he or she can get to the bottom of any problems that are referred to them in future. 
 The amendments provide a good opportunity for the Minister to take us into his confidence and say how this part of the Government's thinking is developing. Although I appreciate that the entire Bill is work in progress, as far as I can make out, it would be nice to hear how far the Government have got.

Malcolm Wicks: I think that we are at one on this matter; it is just a question of how we get there. I am happy to take hon. Members into my confidence—albeit briefly, because it is a simple point. As we heard, the amendments seek to ensure that the PPF ombudsman has sufficient powers to conduct effective investigations. Both amendments would include in the Bill provisions that we intend to set out in regulations. To that end, those Opposition amendments would not have any material effect. That said, I fully support the spirit of the proposals, and I assure hon. Members that the regulations will include procedures on how to refer disputes to the PPF ombudsman, and on how he or she will conduct investigations and obtain information.
 I should add that the regulation-making power in clause 174(1) and (2)(h) will set out that the PPF ombudsman can compel attendance and examine witnesses just as a court can—a point on which the hon. Gentleman was at pains to seek information. As the spirit of the amendment will be covered in regulations, I ask him to withdraw the amendment.

Nigel Waterson: I am sorry; I was just getting the good news that there are more amendments on the way.
 What the Minister says sounds eminently sensible. It was impertinent of me to table the amendment in the first place. I beg to ask leave to withdraw the amendment. 
 Amendment, by leave, withdrawn.

Malcolm Wicks: I beg to move amendment No. 529, in
clause 170, page 108, leave out lines 12 to 18.

James Cran: With this it will be convenient to discuss the following:
 Government amendments Nos. 531 to 533. 
 Government new clause 21—Deputy PPF Ombudsmen.

Malcolm Wicks: I can take the hon. Gentleman's critical scrutiny, and even his scorn; but I find his humility very difficult to take, even so close to the religious holiday that has just been.
 This group of Government amendments deals with the establishment and role of the deputy PPF ombudsman. The provision for the role of a deputy was originally set out in clause 170, as hon. Members know. The new clause sets out when a deputy may perform the PPF ombudsman's functions. If, for example, the ombudsman's work load increases unexpectedly, the Secretary of State may decide to appoint one or more deputies to assist with clearing any backlog, thus ensuring timely decisions that avoid unnecessary delay in dealing with applications. That is important because any delay may affect a decision on whether a scheme enters the PPF. It can also affect an individual's compensation entitlements, and earlier this morning we discussed the importance of speed in such matters. 
 Rather than expanding clause 170 to take account of the provision, we decided that, for the sake of clarity, all matters relating to the deputy position should be contained in a single clause, hence new clause 21. The amendments also amend clause 171, which states that the PPF ombudsman cannot be a member of the House of Commons—[Hon. Members: ''Oh no!'']—so that rules out some very good candidates. That is an important provision. It also rules out Members of the Northern Ireland Assembly. Those exclusions will extend to the deputy PPF ombudsman, too.

Nigel Waterson: It was a bit of a blow to hear that Members of the House are not entitled to apply for the job of deputy PPF ombudsman. [Interruption.] However, if the campaigning skills of the hon. Member for Northavon bear fruit—he was in my constituency yesterday—who knows what will happen?

Steve Webb: I reassure the hon. Gentleman that I campaigned for three target councils last year, and we lost control of all of them.

Nigel Waterson: I can inform the hon. Gentleman that he will not break his record this year. The ghastly, grisly gang running Eastbourne will be booted out in June, but we will not go any further down that route.

James Cran: Indeed; I hope not.

Nigel Waterson: I could see that you were getting a bit nervous there, Mr. Cran.
 It is a blow that people like us are not entitled to apply for the job; it would be the height of someone's personal ambition to be able to boast at the golf club that they were the deputy PPF ombudsman, even as opposed to the PPF ombudsman.

Malcolm Wicks: It is the golf club, then.

Nigel Waterson: I do not play golf; I was citing a fictitious example.
 We have a few thoughts on the matter. It is sensible to have a deputy PPF ombudsman. I am sure that that 
 will be a relief to the ombudsman. I have some questions about who would decide when the deputy kicked in, as it were. That does not seem entirely clear. Will the position be like that of a deputy judge, called on to determine a particular case when the ombudsman is not available, or will it be open to the ombudsman to delegate matters to his or her deputy? The latter is much more sensible because the whole point of a deputy—who knows, there might be more than one—which entitles them to have the tin star pinned to their breast, is that they are there when needed. 
 Subsection (4) of new clause 21 sets out only three circumstances in which the deputy may perform the functions of the ombudsman, the first of which is 
''during any vacancy in that office''.
 That is eminently sensible, if the ombudsman had been dismissed by the fictitious maverick Secretary of State. The second circumstance is when the ombudsman is unable to discharge his functions. That also makes sense. Such events could arise due to illness. The third circumstance is 
''at any other time, with the consent of the Secretary of State.''
 Although, as a Government in waiting, we can see that there are parts of the Bill under which a Secretary of State should have some say, I cannot for the life of me understand why the Secretary of State should have a role in activating the position of the deputy ombudsman. That would call into question what the deputy would do the rest of the time. Is it envisaged that the appointment will be part-time?

Malcolm Wicks: Playing golf.

Nigel Waterson: Apart from playing golf and boasting about being a deputy in the golf club bar, is it envisaged that the position would be like that of a deputy judge—someone who is practising something else, but who is called in when required by the Lord Chancellor or the court service—or will the person be a full-time employee of the ombudsman service? It is important to know the practicalities at this stage.
 The explanatory notes are interesting. When I actually receive them, I often find them more interesting than the bare print of clauses. They state: 
''There is a possibility that the PPF Ombudsman's workload could increase unexpectedly''.
 What does that mean? What is envisaged will happen? Is anything envisaged happening? The context of the explanatory notes, as well as the way in which the new clause is set out, is that the deputy will be available in an unusual situation. He would not be there to take up the slack when there was pressure on the usual working duties of the ombudsman. We are a little puzzled about that, which brings me back to what sort of person is envisaged to be the deputy. 
 Full marks to the Government—well, mostly full marks to the Government. [Interruption.] Yes, I must not get carried away, although there has been a new spirit of comradely co-operation this morning, which, I suspect, is just about to be ruined by the arrival in Committee of the young Turk, my hon. Friend the Member for Tatton (Mr. Osborne). I wish to make it clear that the role of a deputy is important, useful and 
 practical. We are not speaking against that in any way, but I am puzzled about the role and how the deputy will be activated to take on the role of the ombudsman.

Malcolm Wicks: As we have said, the Secretary of State may decide to appoint a deputy ombudsman to prevent backlogs of work from accruing. It is obviously difficult to determine at this stage the exact circumstances. We do not know about the work load on the PPF, let alone on the office of the ombudsman, but we hope that it will be slight. However, the capacity to appoint a deputy on a part-time or a full-time basis, depending on the extent of the work load, is an important provision. I am not sure whether it is sensible or possible to say more about it at this stage but we felt that the provision should be in the Bill.
 I should explain to the hon. Member for Tatton that the temperature he detects in the Committee may be due to the spirit of Easter and an outbreak of humility—sackcloth and ashes—among hon. Members on the Opposition Benches, including the hon. Member for Northavon. 
 Amendment agreed to.

Malcolm Wicks: I beg to move amendment No. 530, in
clause 170, page 108, line 26, at end insert— 
 '( ) about the delegation of the functions of the PPF Ombudsman to its staff or to any such additional staff;'.
 The amendment will ensure that the ombudsman may delegate tasks to the staff available to him, and that the functions that he may delegate are identified clearly in subordinate legislation. The Secretary of State may make provision by order on which functions may be delegated in that way. However, I want to clarify that we do not envisage that staff would ever be permitted to make decisions or determinations on disputes or complaints of maladministration. That function would only be performed by the PPF ombudsman or his deputy. The amendment relates to staff that may be employed directly by the PPF ombudsman, or made available by the Secretary of State, for example on secondment from the Department for Work and Pensions. 
 I hope the Committee will agree that it is appropriate to ensure that tasks are carried out at the appropriate level within the organisation. This is a common-sense amendment to ensure that the functions that the ombudsman or his deputy may delegate to staff are identified clearly in subordinate legislation. Similar provisions exist for the pensions ombudsman, who is permitted to delegate certain functions to staff by virtue of section 145 of the Pension Schemes Act 1993. 
 Amendment agreed to.

George Osborne: I beg to move amendment No. 535, in
clause 170, page 108, line 34, at end insert— 
 '( ) For the purposes of the law of defamation, the publication of any matter by the PPF Ombudsman— 
 (a) in submitting or publishing a report under section 172 or a determination or direction under section 173, 
 (b) in disclosing any information under section 174, or 
 (c) in sending to any person a determination or direction 
 shall be absolutely privileged.'.

James Cran: With this it will be convenient to discuss Government new clause 22—Publishing reports etc.

George Osborne: Amendment No. 535 replicates section 151(7) of the Pension Schemes Act 1993 and gives the PPF ombudsman absolute privilege against defamation in the course of his or her duties.
 When I tabled the amendment I thought it made a good point and I am delighted that the Government subsequently introduced a new clause that would achieve almost the same thing. The proposal is sensible; there will be no need to press my amendment to a Division as the Government have, in effect, accepted my amendment in its entirety in new clause 22.

Malcolm Wicks: The Government proposal to introduce new clause 22 has been grouped with the Opposition amendment because both relate to the ombudsman's power to publish reports, and to the status of those reports.
 I shall begin by explaining the effect of new clause 22, which will enable the PPF ombudsman to publish a report on any investigation of reviewable matters or maladministration that is carried out by virtue of the regulations under clauses 173 or 174. Furthermore, the publication of matters under any of the appeals provisions in chapter 6 will be absolutely privileged for the purposes of defamation, which includes the annual report issuing statements or directions and so on. It is important that the ombudsman has the freedom and independence to reach decisions and to publish those determinations without fear of prosecution for defamation. It is not contentious because the ombudsman will be carrying out a quasi-judicial function. 
 The provision is similar to section 151 of the Pension Schemes Act 1993, which states that reports by the ombudsman also have absolute privilege. The hon. Gentleman has effectively agreed to withdraw his amendment given the Government's position.

George Osborne: That is indeed the case. I beg to ask leave to withdraw the amendment.
 Amendment, by leave, withdrawn. 
 Question proposed, That the clause, as amended, stand part of the Bill.

Steve Webb: I have refrained from contributing until now, because the amendments dealt with specific aspects of the PPF ombudsman. The stand part debate is an opportunity to discuss whether we should have a PPF ombudsman at all.
 All of us, as Members of this House, value the work of ombudsmen and their like. It is important that there is someone to whom one can go who is completely independent, expert and, importantly, free of charge. 
 A judicial process is not required—at least not one in which solicitors need to be paid—and a person can go to the ombudsman who is provided as a last court of refuge. To that extent, the PPF ombudsman seems like a good idea. However, it raises the question of consistency. 
 The danger is that we are taking a piecemeal approach to the setting up of ombudsmen. The closest analogy is the financial services ombudsman, who will be dealing with similar matters and is funded by a levy on the industry. I believe that I am right in saying that the financial services ombudsman is not taxpayer-funded. His accountability is therefore quite different from the accountability of the PPF ombudsman, which is being set up under statute. Constituents of mine with a complaint about a bank, building society or other financial institution already go to the financial ombudsman and they sometimes feel that they have not had an independent hearing when they discover that the ombudsman is paid for by the industry. 
 The PPF ombudsman, which is financed presumably by the taxpayer, must, on the face of it, be an improvement. However, issues of coherence are raised. Have the Government thought about why we would have a taxpayer-funded ombudsman in some cases and not in others? One answer might be that the PPF is taxpayer-funded, so it logically follows. Is there a danger that we will end up with an ombudsman here, an ombudsman there, some being taxpayer-funded, some funded by industry? The quality of service that a person receives and the extent of the ombudsman's independence might end up depending on which body did you down. That is important in relation to people's rights, particularly when it comes to financial matters, pensions and so on. 
 Is there a danger that every time a new body is set up we end up with a new ombudsman, not just in the Department for Work and Pensions but across Government? We will end up with a proliferation of ombudsmen. Being an ombudsman is a very specialist job. One has to know what one is talking about to be the ombudsman for the PPF, and that is probably true of all ombudsmen. Is there a danger that we will end up with a multiplicity of bureaucracy by having lots of separate ombudsmen? Why do we need a completely free-standing PPF ombudsman? Could that service be part of the pensions ombudsman, as the hon. Member for Eastbourne suggested, or could it be part of the parliamentary ombudsman? At what point do Government decide that for every new body we need a new ombudsman, which is free-standing with its own infrastructure, buildings and secretariat? How far is the public sector getting good value for money? The fact that people do not have to pay to access it and it is independent is all good, but is there a danger that such an ombudsman service is not the most efficient way of doing things? Will the work of the PPF ombudsman duplicate things that the pensions regulator is doing? Will the Minister comment on that? Why not use the existing pensions ombudsman or parliamentary ombudsman? Why do we need another ombudsman? Clearly, we want someone who is independent, but is this the way to deliver it?

George Osborne: I am glad to take part in this stand part debate and pick up on the theme of the hon. Member for Northavon about whether we need a separate PPF ombudsman. I am told by the Library that creating such a position would bring the number of ombudsmen in the country to 18.
 I am not sure what the collective noun for ombudsmen is: a complaint of ombudsmen, or a maladministration of ombudsmen? It would be something like that. Anyway, there would be 18 of them. One of the existing 17 is the pensions ombudsman, a position created under the Pensions (Miscellaneous Provisions) Act 1990. 
 I asked my poor researcher to research the subject of ombudsmen. I am sure that the Minister knows that the position was created in Sweden; the first was established in 1809. It took us 158 years to catch up with the Swedes. Since then, we have been making good time by creating all those different ombudsmen. 
 The pensions ombudsman is most relevant to what we are talking about. At the moment, he is Mr. David Laverick. His job is to investigate and make decisions on complaints and disputes about the way in which pension schemes are run. His problem, as he made public in his last annual report, is that he has a complex number of jurisdictions. He does not have a general jurisdiction like the parliamentary ombudsman or the local government ombudsman. I am sure that the Minister will be aware of the Court of Appeal decision in the Britannic case, which drew a distinction between the taking of an administrative act connected with a scheme, which was outside his jurisdiction, and the administrative actions of a person connected with a scheme, which were within his jurisdiction. I am sure that the Minister has taken that on board. 
 That distinction has a practical application: the pensions ombudsman has to tell a large number of people who come to him that, unfortunately, he cannot investigate their cases because they fall outwith his fairly specific areas of jurisdiction. He made that point in his annual report for 2002–03. According to the pensions ombudsman website, that is the latest annual report. I have not seen the report for 2003–04; it probably has not been published yet. The website states that in his report 
''the Ombudsman had stressed the need for greater simplification of the rules governing who can make complaints to him and how such complaints should be dealt with. He recalled explaining to the House of Commons Select Committee during the year that not all kinds of complainant can, as the law presently stands, complain about the same kind of matter, that not all complainants can complain against the whole range of possible respondents and that there was doubt as to whether all those involved in administering pension schemes lay within his jurisdiction.''
 He called for a change in the law that would broaden his jurisdiction and said that a great deal of work and aggravation could be saved without leading to more than a marginal increase in the number of complaints to be investigated. 
 One would have hoped that the Government would have responded to that in this legislation, but they have not. To my mind they have made the matter worse by creating another ombudsman: the PPF ombudsman. That will only add to the complexity. If 
 they had a complaint about the way in which a pension scheme was run, pension scheme members would have to decide whether to go to the pensions ombudsman; if they had a complaint about the way in which a pension scheme had been sold, they would have to decide whether to go to the financial ombudsman; if they had a complaint about the way in which a scheme had been handled by the PPF, they would have to decide whether to go to the PPF ombudsman. If I understand the matter correctly, if they were not happy with any of that, they could go to the parliamentary ombudsman to complain about the way in which the pensions ombudsman, the PPF ombudsman or the financial ombudsman had handled their case.

Steve Webb: The hon. Gentleman has raised an interesting point. Clearly, one can go to the parliamentary ombudsman about the PPF ombudsman because the PPF ombudsman is statutory, but is an industry-funded ombudsman also statutory? Is that not an example of the confusion that we are getting into?

George Osborne: It is very easy to agree with an intervention when the speaker begins by saying that one has made an interesting point. The hon. Gentleman makes an excellent intervention, which makes the point that I am trying to draw out. It is extremely confusing. It is difficult enough as Members of Parliament to know which is the best ombudsman to refer someone to, and we are used to dealing with such cases day in, day out. A member of the public would probably never have been to an ombudsman and would not even have known what an ombudsman was until they suddenly needed one. It will be extremely confusing.
 The Government have not spelled out some good, practical reasons why there must be two separate ombudsmen. Within the ombudsman profession, if there is such a thing, there is concern about why two ombudsmen are needed. 
 The hon. Gentleman also raised the question of cost. It would, one assumes, be far cheaper to have a single ombudsman for all pensions issues. It would be far simpler and would avoid the cost of duplicating staff and offices. There is no mention in the regulatory impact assessment of the cost of setting up the PPF ombudsman—at least, not that I have discovered. Presumably, there is a considerable cost, if offices, buildings and so on must be found. The existing pensions ombudsman, in the same annual report, complains about the current resources that he receives: 
''The bare facts are that in 2002–2003 I received 3,891 enquiries and dealt with 3,684. The net result is that despite a great deal of hard work from my staff and myself, we have been failing to keep up with the incoming tide. The position is likely to be even more difficult in the current financial year''—
 the year that has just ended— 
''That is when the bulk of time needs to be spent on the work taken in the last year. So far I have allocated no additional resources to cope with that work.''
 He is struggling with the resources that he already has. Now the Minister is proposing to set up a wholly separate ombudsman. Will he at least give us an assurance that the new PPF ombudsman will have the 
 resources that he needs to do his job? Will the ombudsman be able to call in the Government in emergencies? It is possible to imagine that the PPF ombudsman will have a fairly quiet time for month after month—possibly year after year—as a few cases go into the PPF process, after which there is suddenly a rush of collapses and a huge increase in his work. Will the Minister reassure us that that kind of contingency has been provided for? 
 I understand that the Government's reasons are rather technical ones relating to giving effect to section 54 of the Child Support, Pensions and Social Security Act 2000, and that that is the reason behind the creation of two separate ombudsmen. However, many people in the industry to whom we have spoken think that there is a practical problem that can be easily overcome. Perhaps the Government could consider that. The Minister may not have focused—given all the other issues in the Bill—on the question of a PPF ombudsman with all the detail and clarity that he brings to many subjects. Perhaps he will reflect on what has been said and think about whether we need to create two separate ombudsmen. Could not we give the pension ombudsman the powers to investigate the activities of the PPF, thereby making it not only much simpler for the clients, as we must now call them, but much cheaper for the taxpayer?

Malcolm Wicks: It has been a useful discussion.
 The effect of the Britannic case, which the hon. Gentleman mentioned, has been to create problems relating to the existing ombudsman's jurisdiction in one-off administrative actions. The pensions ombudsman is currently unable to investigate complaints and disputes that he was intended to investigate. We will discuss that further when we deal with new clauses on the pensions ombudsman, because it is important. 
 Considering whether it is really necessary to set up a new office of PPF ombudsman, I should like to emphasise that the PPF, as we have discussed previously, is not a pension scheme; it is a compensation scheme for members whose pension schemes are unable to provide them with the benefits that they were expecting. The distinction about who will deal with members' disputes will be clear. For example, if a pension scheme member receives a pension forecast from his scheme showing that he has 20 years' accrued rights but he actually has 25 years' rights, that dispute will have to be raised through the scheme's internal disputes procedures. Conversely, when an approved PPF valuation has been issued and the scheme member is advised that his PPF compensation will be based on fewer years than he thought, the dispute will need to be dealt with through the PPF disputes procedures. Of course, the matter will then be passed to the ombudsman, if necessary. Given the unique nature of the PPF, the case for the new office of the ombudsman is clear. 
 The costs of the ombudsman will be paid for by Government, but the money will be recovered from the administration levy, so the money will ultimately come from the schemes. That seems appropriate. 
 We have had an interesting discussion about the importance of the office of ombudsman and the concerns of some hon. Members that there might soon be a plethora of such ombudspeople in Britain. The hon. Gentleman reminded us, thanks to his able research assistant, of the Scandinavian origins of the ombudsman's office. I am not sure what the collective noun of ombudsmen is; a smörgåsbord, perhaps, but that may be more Danish than Swedish. I have forgotten. However, certainly there are now several ombudsmen. 
 I hope that I have convinced Members that, given the unique nature of the PPF, we need a separate office-holder, to be called the PPF ombudsman. Having said that, none of us can predict the volume of business. We have discussed the need for provision in the Bill for a deputy position, in case the volume becomes substantial. I am aware that there is an issue to do with how the PPF ombudsman's post relates to that of the current pensions ombudsman. 
 I share with the Committee our intention to start discussions with the pensions ombudsman soon on how his role could be related to that of the PPF ombudsman. It is important not to be specific about that in the Bill, but if it seems sensible to combine the functions of the PPF ombudsman with those of the pensions ombudsman—I do not want to make any final judgment about the matter—we would consider it. However, we have certainly not yet discussed that with the ombudsman, although we have informed him that we want to have that discussion very soon. I repeat that that is not necessarily the road that we will take, not least because of the difficulty of determining what the volume of business will be in the first year or two. However, that is a sensible discussion that my Department should be having. 
Mr. Osborne rose—
Mr. Webb rose—

Malcolm Wicks: I give way first to the hon. Member for Northavon.

Steve Webb: I am very grateful.
 I do not think that the Minister has convinced us; he has merely asserted that we need a separate ombudsman because PPF is unique. Everything is unique in a sense, but why does the PPF need its own ombudsman? We need a bit more than that, to be honest. 
 Not to repeat what the Minister said about the relationship between the PPF and pensions ombudsmen, surely it is perfectly conceivable that someone would have ''problems with their pensions'' that involved them in simultaneous dealings with both ombudsmen. It is an absurdity that someone should have to divide their pensions problems between two ombudsmen. Why not put it all under one roof?

Malcolm Wicks: I will give way to the hon. Member for Tatton when I have tried to deal with that last point; I have no doubt that my answer will just be another assertion, but I will do my best to appear wise about the subject to the hon. Member for Northavon.
 For once, the word ''unique'' is being used appropriately. The PPF is a new institution, and 
 there is nothing like it. The issue of how to deal with disputes arises, and we discussed that today in relation to internal procedures. We have argued that we need an ombudsman for the office. We need to legislate for that, and we think that it is important that provision for the post is put in the Bill. 
 Because I think it appropriate to do so, I have shared with the Committee a discussion that we are having. We have alerted the pensions ombudsman to the fact that we need to have a discussion with him about whether it is appropriate for issues that the PPF ombudsman would deal with to be under the same roof—literally, perhaps—as those dealt with by the current pensions ombudsman, and about the possibility that that same individual could perform both functions, at least for a time. [Hon. Members: ''Oh!''] There are pros and cons. [Interruption.] I am not sure that I would want to put it as sharply as that, but this is a discussion that we need to have. 
 I do not think that there is any inconsistency in saying that we need to assert in legislation that there should be an ombudsman's function but that we also need to think through carefully, having regard to the volume of business and the costs, whether we should combine things by having one person and one deputy, at least for a period. It might be the case that we should do that, at least until we understand the volume of business into the coming decade.

George Osborne: In a day of U-turns—the statement on the European constitution will be made soon—that may not be the greatest of them. However, it is good to hear the Minister conceding that the Government are considering having a single ombudsman, even if the same person wears two hats. I want to be absolutely clear: I understand that things are not fixed and that there are conversations that the Government need to have, but am I right that they are thinking of starting with the same person fulfilling both roles, presumably with the current pensions ombudsman also fulfilling the role of the PPF ombudsman, and that if the volume of PPF work grows to a great extent they would think of having two separate ombudsmen? Is the Minister saying that they would start off with one combined office but that they would leave open the option of having two separate offices in the future? This is a lengthy intervention, but it is confusing that the same person will exercise different powers in different capacities. We will address the powers later, but will the Minister clarify this confusing matter?

Malcolm Wicks: Because of the etiquette of how to address hon. Members, I should not quote the famous phrase, ''You can turn if you want to.'' However, the hon. Gentleman can turn if he wants to but, with regard to including in the Bill a PPF ombudsman, we are not for turning. We are legislating for an ombudsman for a new pension protection fund. It is important to include that in the Bill. I have been sharing our thoughts with the Committee because I thought that that was appropriate. We consider that it is proper that we think through the practice of this. We have notified the ombudsman of our need to discuss this matter with him, but we have not yet had that discussion.
 There is sensitivity about this, but we are discussing it in Committee. We are scrutinising it. I appreciated that this perfectly proper question about whether we need two buildings and two sets of salaries would arise, and I thought that it would be sensible of me to share my thoughts with Members. The opinions of the current ombudsman will be important. I can imagine that there are pros and cons about whether combining is sensible. There may be disadvantages, and the pensions ombudsman might bring some of those into our thinking. That is why I am not saying what the outcome will be. 
 The hon. Member for Tatton made a point about the time scale. With regard to all the institutions that we are establishing, none of us can be certain about volumes of work and demand. The PPF ombudsman will probably have relatively little work to do for a year or so; it will take a long time for companies to become bankrupt or insolvent and for the PPF to have to swing into action. Therefore, it is difficult to determine when the first application to the PPF ombudsman might be made. Those are the kinds of practical issues that arise with regard to the establishment of that post. I am thinking aloud, but not drawing conclusions. It is useful to have had this discussion in the Committee. Should we decide to combine the roles in one person, we would have to consider whether that would be for the short, medium or long term; but the arguments for doing that in the short to medium term might be significant.

Steve Webb: I seek some clarification. Discussions with the current pensions ombudsman are ongoing. Has the ombudsman expressed a view on whether a separate PPF ombudsman is needed?

Malcolm Wicks: I understand that we have asked the pensions ombudsman to discuss that matter, but that that discussion has not yet taken place. As far as I know, he has not expressed an opinion to us on the matter. It would be interesting to get his view on it. I suspect that the balance is not necessarily in one direction.
 The point is—it is not just a matter of semantics—that two separate offices are important. The fund is new and unique, and we need to have a recognised way in which an appeal to an ombudsman figure can be undertaken, whether that necessitates two separate individuals, perhaps in two separate buildings, or one individual.

George Osborne: It seems a bit strange that the Minister says now that he wants to have that conversation with the pensions ombudsman—because it is important that he talks to him—but that he has not yet done so. When he or his officials were involved in drafting the legislation and decided to create something called a PPF ombudsman, would it not have been sensible for them to speak to the existing pensions ombudsman, given all his experience, before introducing the legislation? Would it not have been better to have the conversation before coming to the Committee rather than afterwards?

Malcolm Wicks: Others would have argued that if we had done that it would have been inappropriate to do so before discussing these matters in Committee.
 The provision as drafted, which I recommend that the Committee accepts, gives us the flexibility that we need. It is important to put into statute the notion of a separate office of PPF ombudsman. How that is brought into being—I shall not repeat all the arguments—is another matter. I thought that rather than argue a line against proposals that the office should be contained under the same roof or in the same person, it was important for me to share my Department's thinking on the matter with members of the Committee. No doubt that approach to open government will invite fresh scrutiny, but so be it. 
 Question put and agreed to. 
 Clause 170, as amended, ordered to stand part of the Bill.

Clause 171 - Disqualification of PPF Ombudsman from certain offices

Amendments made: No. 531, in 
clause 171, page 109, line 4, after 'Fund', insert 
 'and any deputy to that Ombudsman appointed under section [Deputy PPF Ombudsmen] of the Pensions Act 2004.'.
 No. 532, in 
clause 171, page 109, line 7, after 'Fund', insert 
 'and any deputy to that Ombudsman appointed under section [Deputy PPF Ombudsmen] of the Pensions Act 2004.'.—[Malcolm Wicks.]

Malcolm Wicks: I beg to move amendment No. 557, in
clause 171, page 109, line 7, at end insert— 
 '( ) In Schedule 4 to the Parliamentary Commissioner Act 1967 (c.13) (relevant tribunals for the purposes of section 5(7) of that Act), at the appropriate place insert— 
 ''The Ombudsman for the Board of the Pension Protection Fund established under section 170 of the Pensions Act 2004.'' '.
 I am sorry to be hogging the limelight—such as it is in a Committee—but I know that my hon. Friend the Under-Secretary will get into his stride later today. 
 The amendment makes provision for dealing with maladministration claims against the staff of the PPF ombudsman. We hope that such complaints will be few—in an ideal world they would be non-existent. However, we must make provision for such complaints to be dealt with and intend to do so by amending the Parliamentary Commissioner Act 1967. That will allow the parliamentary ombudsman to deal with any complaints that are made. The provision mirrors the one that is already in place for complaints against the staff of the pensions ombudsman. 
 Amendment agreed to. 
 Clause 171, as amended, ordered to stand part of the Bill.

Clause 172 - Annual reports to Secretary of State

George Osborne: I beg to move amendment No. 516, in
clause 172, page 109, line 11, leave out 'the Secretary of State' and insert 'both Houses of Parliament'.

James Cran: With this it will be convenient to discuss amendment No. 517, in
clause 172, page 109, line 13, leave out subsection (3).

George Osborne: This is just a good old stab at trying to defend the rights of Parliament, by changing the person to whom the PPF reports from being the Secretary of State, as it is under clause 172, to Parliament.
 Many organisations report to Parliament rather than to the Secretary of State. One could argue that parliamentary pressure and campaigns, for example that of the hon. Member for Cardiff, West (Kevin Brennan), have pushed the Government into creating the PPF in the first place. I would freely concede that much of that has come from the Government Benches rather than from Conservative or Liberal Democrat Members—although we have played our part. Therefore, it seems only appropriate that having created that organisation and the PPF ombudsman, Parliament should be reported to by the ombudsman about how things are proceeding. 
 I am ever an optimist; after all, I was calling for a referendum on the European constitution three weeks ago, and we have seen what has happened. If the Government feel minded to accept my amendment, the PPF ombudsman would send a report to Parliament rather than to the Secretary of State as soon as practicable after the end of the financial year for which it is prepared. I have proposed deleting subsection (3), but I would assume that in those circumstances Parliament would make the report available or it would have it published. That was the purpose of the amendment and I look forward to its being accepted by the Government.

Malcolm Wicks: As drafted, clause 172 requires the PPF ombudsman to prepare an annual report on the discharge of his functions. It will be sent to the Secretary of State as soon as practicable after the end of the financial year to which it relates and they must then arrange for it to be published. As the PPF ombudsman is to be appointed by the Secretary of State, those matters are an important part of the Secretary of State's stewardship role. It is therefore important for the Secretary of State to be involved with the annual report's publication and that involvement would be removed if the amendment were to be accepted.
 The clause as drafted mirrors the provisions in place for the pensions ombudsman. While there is no requirement for his annual report to be sent to both Houses of Parliament, that is done as a matter of courtesy. The same courtesy will apply to the PPF ombudsman's annual report. The important thing is that members of the public and Members of Parliament are able to read it. I suspect that when people read the first report in the public taverns of Tatton they will not say to themselves, ''Oh crikey, this went to the Secretary of State first''. They will simply get on and read what will, no doubt, prove to be a fascinating report about a unique and important piece of social progress. I beg to move.

George Osborne: I was very excited as the Minister begged to move my amendment; suddenly, I could see my troops lining up behind me.
 I made a small point and I was trying to defend the rights of Parliament. Of course, it is good to have the Minister's assurance that the report will be given to Parliament and published by the Secretary of State. It might not be a thing that we talk about in pubs in my constituency or, indeed, in Croydon. However, maybe they were not talking in the pubs of Croydon about the arrest by Charles I of the MPs when it happened, but that did not mean that it was not important.

Malcolm Wicks: Whose side was the hon. Gentleman on?

George Osborne: I was on the parliamentary side, of course. With that, I beg to ask leave to withdraw the amendment.
 Amendment, by leave, withdrawn. 
 Question proposed, That the clause stand part of the Bill. 
 It being twenty-five minutes past Eleven o'clock, The Chairman adjourned the Committee without Question put, pursuant to the Standing Order. 
 Adjourned till this day at half-past Two o'clock.